Industry pioneer says rising hype may hurt growth
Inside the Hynes Convention Center, it feels like 1999. About 5,000 engineers and venture capitalists have gathered here to discuss and to celebrate one of the hottest technology markets in the world -- the use of Internet technology to move telephone calls. This week's VON (for ''Voice over the Net") Conference features the same breathless optimism that drove the Internet business at the end of the last century.
Jeff Pulver can feel the fervor, and it worries him, even though he's probably done more to stoke it than anybody else. Pulver latched onto the idea of sending phone calls over the Internet in the mid-1990s, when voice-over-Internet Protocol (VOIP) technology was too crude for serious use. A decade later, Pulver runs a global network of trade shows devoted to Internet phone systems. He's the co-founder of Vonage, the best-known Internet phone company. He's the best known and most respected man in the industry.
And still, Pulver is worried that the hype around Internet phones may be getting dangerously out of hand. He recognizes the signs. ''They've turned it into a fashion statement," Pulver said. ''The problem with being a fashion statement is that fashions come in and out."
Pulver fears too much venture capital chasing too many weak business plans. And he worries that the federal government might saddle Internet-based phone companies with the same regulations that burden the traditional phone companies. ''In some cases, excessive hype is going to bring in excessive regulation," he said.
He's been there. Pulver prospered in the late 1990s, and suffered through the post-2000 Internet bust.
Luckily, Pulver's the kind of person who's constantly starting over, whether he needs to or not. He estimates that he's running about 30 businesses right now, ranging from a venture that sells Internet telephone gear to a business that markets virtual phone numbers. If you live in Paris but want a Boston phone number, Pulver will fix you up. Then there's Free World Dialup, his service that lets people call each other over the Internet free of charge. It brings in no money, but lots of recognition. When state telephone regulators tried to crack down on the service, Pulver appealed to the Federal Communications Commission. The FCC decreed in February that Internet phone services are information providers not telephone companies. Therefore existing state telephone regulations don't apply. This leaves open the question of whether states can write new Internet phone regulations.
It was the first time the FCC had issued a ruling on Internet phone services. Fortunately, Pulver has friends in Washington, including FCC chairman Michael Powell, who spoke at the conference yesterday. When the FCC was just beginning to grasp the potential of Internet phone systems, the agency tapped Pulver as an information source. ''Jeff. . .was really well known as a radical innovator in the space," said Powell. ''He was just an extraordinary spokesperson for what the potential was."
Pulver's knack for communicating dates back to his days growing up on Long Island. A ham radio enthusiast, he'd accept radio calls from US military personnel based overseas. He'd place long distance calls to the soldiers' relatives, then patch the radio into the phone circuit for a cheap international call.
Two decades later, Pulver was working for bond trading firm Cantor Fitzgerald and tinkering with an early, primitive Internet phone program. Pulver tried patching his PC to the phone. It worked. He'd found a way to link Internet phone callers to the traditional phone network. In 1995, Pulver launched Free World Dialup to let people easily make free Internet calls.
In 1996, after attending an Internet phone conference in London, Pulver decided he could do a better job. ''The people who put on the conference knew absolutely nothing about the culture and the people and technology," he said. So Pulver held his own conference in New York later that year. When 200 people showed up, he held another conference in San Francisco; 500 people showed up.
His relentless energy -- ''If I get more than six hours' sleep, I'm tired" -- and his extroverted personality made Pulver's conferences a hit. Indeed, Boston-based convention firm Key3 Media bought the rights to run the conferences in 2001, for $60 million.
Pulver sold just in time. The tech collapse devastated the trade show business. Key3 eventually went bankrupt and Pulver bought back the conferences for $5 million.
The remaining cash has let Pulver launch his many other businesses. He's also able to indulge his fondness for poker and parties. On Monday, he hosted a celebrity poker tournament with poker champion Phil Hellmuth and John Ratzenberger of the TV series ''Cheers." The games raised $75,000 for diabetes research, a favorite charity for Pulver, whose wife is diabetic. Tonight, Pulver continues a tradition at his trade shows -- a big rock-and-roll party, this year featuring the band The Goo Goo Dolls.
With celebrity poker and high-profile parties, it's almost as if the Internet boom never went away. But Pulver knows better. ''I can tell you that a lot of people here today don't realize how bad it was," he said, ''and they probably don't have a perspective on how good it is today."
Hiawatha Bray can be reached at bray@globe.com. 